Paramount rebuts states’ antitrust bid to block Warner Bros deal
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Paramount Skydance has filed its first detailed rebuttal against an antitrust lawsuit brought by a 12-state coalition seeking to block its $111 billion merger with Warner Bros. Discovery, dismissing the case as "one of the weakest merger challenges in modern antitrust history." The dispute came to a head at a hearing on Friday before Judge Araceli Martinez-Olguin, where the states, led by California Attorney General Rob Bonta, sought a temporary restraining order to pause the deal, but their bid to block the merger failed. Paramount+ subscribers who had separately tried to halt the merger also failed in their attempt, though the states indicated they would try again.
Paramount's lawyers argued that low barriers to entry from rivals including Universal, Disney, Amazon MGM, Sony, Lionsgate, A24 and NEON meant the states' market concentration figures were irrelevant, pointing to Amazon MGM's box-office success with "Project Hail Mary" as evidence competitors could readily expand output. The states had claimed the merged company would control 30% of blockbuster film distribution, with four firms holding 93% of the market, and warned of unfair leverage over cable and satellite providers given Paramount and WBD's combined cable holdings. Paramount countered that its and WBD's channel lineups were complementary rather than competing, and that cord-cutting was eroding all cable programmers' bargaining power regardless of the merger.
- Paramount beat back states' bid to temporarily block its Warner Bros. merger
- States, led by California, called the $111bn deal anti-competitive
- States say they will renew their legal challenge
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The proposed deal would combine Paramount Skydance, which owns the Paramount film studio, CBS and Paramount+, with Warner Bros. Discovery, the owner of Warner Bros studios, HBO and several television channels. Together, they would bring major film, streaming and traditional television businesses under one company.
US competition law allows states and federal authorities to challenge mergers if they believe they could reduce competition and lead to higher prices, less choice or weaker terms for other businesses. The states involved argue that the combined group could gain too much influence over blockbuster films and television channels.
Paramount says the entertainment market remains crowded, with large rivals in film and streaming, and that changing viewing habits have reduced the power of cable television owners. A court considering the challenge must assess whether the merger is likely to harm competition, rather than simply whether it would create a very large company.
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Originally published by Variety as “Paramount Slams States’ Lawsuit Over Warner Bros. Merger as ‘One of the Weakest’ in Modern History”.